The genesis of Queensland’s new labour hire licensing laws was the systematic exploitation and mistreatment of workers on Queensland’s farms. But the new laws extend well beyond that industry.
Many contractors and sub-contractors in the civil construction industry are likely to be covered by the new laws and could face hefty fines if they do not apply for a license before 15 June 2018.
A few bad apples
In 2017 media reports of seasonal farm workers stranded in regional locations receiving only sporadic employment and living in bug infested accommodation caught the eye of the Queensland Government.
On 25 May 2017 the Labour Hire Licensing Bill (Qld) 2017 was introduced to Parliament and was intended to “clean up” the labour hire sector by establishing a mandatory business licensing scheme.
The bill was passed by Parliament on 8 September 2017 and the new licensing regime started accepting applications on 16 April 2018.
Who is a labour hire services provider?
Under the Labour Hire Licensing Act (Qld) 2017 (the Act) labour hire providers must have applied for a license by 15 June 2018 or risk strict financial penalties. After this date host employers must only use licensed labour hire services or also face hefty fines.
The definitions of ‘labour hire services’ and ‘worker’ in the Act are very broad. The Act defines ‘labour hire services’ as follows:
'A person (a provider) provides labour hire services if, in the course of carrying on a business, the person supplies, to another person, a worker to do work.’
Are construction companies exempt?
Clause 7(3) of the Act says that a person is not a labour hire provider merely because the person is:
‘a contractor who enters into a contract to carry out construction work within the meaning of the Building and Construction Industry Payments Act 2004 section 10 and engages subcontractors to carry out the work’ .
For many in the construction industry the initial reading of this exemption led them to believe that they were automatically exempt under the act.
It is now clear that the exemption for construction workers doesn’t mean that sub-contractors can never fall under the Labour Hire Licensing scheme, just that a contractor is not a labour hire provider merely becausethey enter into a contract to carry out construction or building work.
This means that many sub-contractors and contractors must urgently consider the question of whether they need to apply for a license.
For example if a company on-hires any of their workers to another company to operate that other company’s own equipment and do work in and for that company, then this could be considered as labour hire and that company would need to be licensed.
Each situation is judged on its own merits so even if the above scenario is a one off and all the other activities of the company are not captured by the Act they may still need to have a license or be liable to be fined under the Act.
If you enter into an arrangement with an unlicensed labour hire provider, the maximum penalty is three years’ imprisonment, or a fine of up to $130,439 (1034 penalty units at $126.15 per unit).
If your company enters into an arrangement with an unlicensed labour hire provider, the company could be fined $378,450 (3000 penalty units at $126.15 per unit).
The licence fees are:
· Tier 1 Business - Wages of less than $1.5 million - $1000 fee
· Tier 2 Business - Wages more than $1.5 million but less than $5 million - $3000 fee
· Tier 3 Business - Wages more than $5 million - $5000 fee
For new businesses, their tier will be designated on the basis of their projected wages for the coming financial year.